Posts Tagged ‘Motorola’

With all of the attention Google bought for buying Motorola Mobility for its patents, one question that not too many people asked was whether or not those patents were any good. Of course, when you’re dealing with 17,000 patents and the fact that Google has shown no signs of planning to go on the offensive with patent fights, it seems clear that the point of getting this patent portfolio was very much about quantity over quality — mainly to ward off lawsuits from other big companies, with the recognition that somewhere in those 17,000 patents was probably something that the other company infringed upon.

Still, the folks at M-CAM decided to put the Motorola Mobility patent portfolio to the test by using a variety of scoring techniques, and believes that the portfolio isn’t all that valuable, both in the aggregate and at the specific level. It basically found that about 48% of the patents are probably worthless. At the specific level, the company looked at the 18 patents that Motorola Mobility had asserted against Apple, suggesting that these particular patents may be the “stars” of the bunch — but, again, found that nine of those patents were “impaired,” and were unlikely to be very strong or valuable.

The report notes that buying and maintaining dubious patents probably isn’t a particularly good value by itself:

Google is paying $12.5 billion for alleged assets that include a 17,000 patent portfolio, of which close to half appear to serve as deterrent value alone. The cost of maintaining patents of dubious quality will be an ongoing and potentially unnecessary liability to Google and its shareholders. Regrettably, close to half of the portfolio deemed “best” based on previous assertions have substantial weaknesses. Google’s patent stockpiling initiative appears to be focused entirely on deterrent value rather than on acquiring quality assets. Google shareholders may take some small solace in the adoption of a multi pronged defensive strategy, but may want to demand higher quality standards for the assets and liabilities acquired in future transactions.

Of course, if Google’s goal is longer term, it’s possible that this isn’t such a crazy deal. Already, we’ve seen that this acquisition alone has been a key driving force in getting lots of people (and especially the press) to admit that the patent system is clearly broken. Spending that much to get that kind of widespread awareness may be worth it… if it leads to real reform (which is still a big question mark). On top of that, if the quantity of patents has a deterrent value, no matter the quality of the overall bunch, it’s likely that Google will still find it “worth it.” However, the fact that it now needs to maintain these 17,000 patents, where approximately half may have no direct commercial value, really demonstrates (yet again) the massive “tax” of bad patents on companies.

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For several years now, Google has been following a vow made by former CEO Eric Schmidt: mobile first. New CEO Larry Page is taking that dictum to a new level by announcing a deal to buy Motorola Mobility for $12.5bn.

The implications of this deal depend entirely on how Google plans to use Motorola. If, as some claim, the deal is more about obtaining Motorola’s mobile patent portfolio than anything else, we can expect escalating patent warfare between technology giants and limited innovation beyond that. If, however, Google intends to operate the business it is acquiring, we may see some broad and sweeping changes in the technology industry.

If the deal is chiefly about obtaining Motorola’s mobile patent portfolio, then Google would likely spin off the hardware end of the company and keep the software and patents. The patents would be vital weapons in its competition with Apple and Microsoft, as the two companies are using patent claims to try to slow the remarkable growth of Google’s Android operating system, which has become the most widely used smartphone platform.

But assuming Google intends to operate the business it is purchasing – and also assuming, as seems probable, regulatory approval of the deal – the landscape for Google, and the technology industry more broadly, will change. Some of the implications are clear already.

Perhaps Google wants to be more like Apple, owning an entire ecosystem around Android. For all its success, Android has suffered from “feature balkanisation”, as phone manufacturers and carriers have turned the open source system to their own aims.

Motorola knows how to make good hardware (though it’s been outdone in that regard by Samsung and HTC in the Android market), and one can imagine some excellent devices – once Google controls the outcome, as it did with its initial Nexus One phone (made by HTC) and Nexus S (Samsung).

So – Google has acquired Motorola’s mobile phone business for a whopping $12.5 billion. Things just got very interesting in the Google, Apple and Microsoft battle.

Last week, we wrote about how Android was under threat in an ongoing patent war with a number of companies – including Apple, Microsoft and Oracle. An obvious step by Google was to embed itself in the handset business, but it’s probably fair to say that not many people saw this acquisition coming. To say this news is huge would be somewhat of an understatement.

Android now has around half of the global smartphone market. And combined with iOS, Google and Apple account for over two-thirds of the smartphone market globally.

It’s easy to explain Android’s dominance. It’s a free, open-source platform, and thus can be used by any mobile phone manufacturer, just as the likes of HTC, Samsung, Acer, Sony Ericsson, LG and Motorola already do.

The patent war…

However, Microsoft in particular has been taking swipes at Google through targeting handset makers that use Android – it’s built on the Linux Kernel, which supposedly infringes multiple patents owned by Microsoft. As such, companies such as HTC – which uses Android on many of its handsets – must pay Microsoft for each handset it sells with that operating system installed.

And in recent times, it seems the battle for supremacy has descended into simple patent acquisition to get one-up on rivals. CPTN Holdings is a consortium of technology companies that include Microsoft, Apple, Oracle and EMC Corporation. It secured a portfolio of 882 patents from Novell when it was acquired by Attachmate. Then there’s the Rockstar consortium, which also has Apple and Microsoft as members, and it recently won the auction of 6,000 patents/patent applications from Canadian telecoms company Nortel.

Google too has been engaging in similar patent-acquiring activities, recently securing over a thousand patents from IBM.

But news that Google has acquired Motorola Mobility means that besides now adding a mobile phone company to its repertoire, it also owns many, many patents.

A very interesting move by Google this morning, buying handset hardware maker Motorola for $12.5 billion.

Google deserves credit for a big, bold move.

But let’s be real: This deal could end up being a disaster.

How?

Well, for starters, the deal creates major channel conflict: Google is now competing with its partners. And hardware manufacturing is an entirely different kind of business than Google’s core business. And hardware manufacturing is a crappy, low-margin commodity business. And Motorola is massive–Google has just increased the size of its company by 60%. And the deal appears to be purely a defensive move, not an offensive one. And so on.

Let’s have a look at some of the host of questions and challenges the deal raises, starting with the channel conflict:

How do HTC and Samsung, two of the leading Android-based smartphone makers, feel about the fact that their “partner” Google is now competing directly with them for hardware sales?

And we mean, how do they really feel, internally, not “what are they saying in public?” (The quotes Google has assembled from HTC, LG, et al, all appear to have been written by the same PR person–note the similarity in the language.)

The only reason Android (and Google) have any share of the mobile game, after all, is because hardware makers like HTC and Samsung adopted Google’s software platform. And now Google is stabbing them in the back.

By now, it’s probably too late for Samsung and HTC to switch to another platform, so they’ll have to smile and make the best of it. But still… having your software “partner” suddenly fire a missile down your throat can’t feel too good.

And if Google-owned Motorola starts to gain share in the hardware business, the feeling (and tension) will only get worse.

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This is news that few saw coming – Google has bought Motorola Mobility for $12.5 billion. From a developer’s point of view this is a mixed blessing with some potentially good aspects and some potentially bad ones.

First it is worth saying that Motorola’s phone department wasn’t really much compared to what it once was and perhaps finding a backer like Google is just what it needed. On the other hand Google doesn’t really have a track record for designing hardware that makes any sort of impact at all. As Motorola went 100% Android recently, its acquisition by Google doesn’t affect any other platform directly.

The first big problem for Google is that it has just acquired a company that has a lot of employees at a time that Google itself is expanding at a rate that must make it hard to manage. This leads on to the problem that the other manufacturers of Android hardware must be thinking that Motorola will now get insider status. Google has stated that the Motorola division will be kept separate and treated on an equal footing with other hardware manufacturers. Even so, if you were an Android handset maker wouldn’t you be looking to see what else was on offer – say, Windows Phone 7?

A key element in the purchase is the fact that Motorola has 17,000 patents and 7,500 pending. This is three times the number that Nortel held when Google failed to win the auction by bidding silly numbers. In the light of the takeover perhaps the bidding wasn’t quite so silly. In fact many are saying that it was all a brilliant ploy by Larry Page – who knows?

It is also difficult to work out what the effect of the patents will have on the Oracle Google lawsuit which is still grinding on. Google also inherits a number of lawsuits involving Motorola – notably Motorola v Microsoft.

It is easy to see the acquisition as just being about patents, but Google could probably have achieved the same result by simply licencing that patents for a much lower sum. Whatever the rationale it is clear that this is all about Android.

To quote Google:

“The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.”

We will have to a wait and see what it all means, but it clearly is a shake up for the Android market. Whether it makes the whole enterprise more secure, has no effect, or drives manufacturers into the arms of alternative platforms, only time will tell.

Nokia Siemens Networks announced today that it will begin it’s planned layoff of 1,500 employees. The decision comes following its acquisition of Motorola’s networking business for $1.2 billion. The employees to be axed will come primarily from the WiMax and GSM departments of the former Motorola unit.

The action became necessary after the Motorola network acquisition got stalled when Huawei filed a lawsuit seeking to halt the transaction for fear that NSN would obtain its trade secrets and intellectual property, which Motorola had access to. This, in turn, caused the unit’s products and services to fall into lower demand.

Hence, not only will 1,500 of the 6,900 employees from the Motorola WiMAX and GSM units be let go, but another 1,200 will be transferred to its LTE and WCDMA units, which are currently seeing more success. The first batch of workers to go will be 150 of mostly research staff from Nokia Siemen’s Swindon facilties.

Apple’s iOS handset sales are mainly generated from from one new model per year, although older models also contribute. Android sales are derived from a vast number of different phones using Google’s platform.

The U.S. is poised, however, to see these two companies go head to head. It’s expected that Apple will announce and release a new iPhone in August or September. Samsung introduced the Galaxy S 2 in May, spreading availability to many countries outside of the U.S. and claims 5 million sales in just 85 days.

Several U.S. versions of the Galaxy S 2, varying by carrier, are likely to launch within the next month or two, including at least one for AT&T that may have a hardware keyboard. AT&T accounted for more than 17 percent of all iPhone sales last quarter, so that particular battleground should prove interesting.

At 6.5 ounces, the phone is heavier than most smartphones, but the main reason is due to the 4-row QWERTY keyboard that hides under the 3.7-inch display. A 1.2 GHz dual-core chip keeps the phone moving along quickly and the wide aperture 8 megapixel camera is paired with smart software that supports a fast burst mode, HDR images and wide panoramic views.

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